The legend of the ‘Tesla killer’ finally came true, and it’s Elon Musk

The legend of the ‘Tesla killer’ is not a myth anymore. It came true, and it’s not an electric vehicle from a legacy automaker or a new EV startup; it’s Elon Musk, Tesla’s CEO.

In the early days of Tesla, the media loved to use the term ‘Tesla killer’ every time a legacy automaker launched a new EV.

At the time, we scolded them for using it, as they would apply it to electric vehicles that didn’t match Tesla’s performance, production volumes, or profitability.

Sure enough, none of them came even close to negatively affecting Tesla, let alone “killing” the company.

But things are changing now. Tesla is not growing at an insane pace like it was for a decade. In fact, it’s not growing at all anymore. Tesla’s global sales declined annually for the first time in 2024, and it is starting even worse in 2025.

It is undisputable that the increased EV competition is having an impact, but there isn’t a single EV model that can be deemed a “Tesla killer”—even though we do see a couple of Chinese EVs as having quite an impact on Tesla.

Most Tesla fans, myself included, thought that while Tesla’s market shares would go down amid more EV competition, its sales would continue to grow as EV adoption takes over the industry. That’s exactly what happened for a few years, but the trend reversed in 2024, and it’s not because of EV adoption.

Global EV sales surged by 25% in 2024, while the sales of the biggest EV automaker, Tesla, declined by 1%.

There are many reasons to explain this situation, but there’s one main culprit: Elon Musk.

Musk has been completely delusional about Tesla achieving self-driving capability for years, which led him to neglect the rest of Tesla’s automotive business as he thought that by the end of every year for the last 6 years, Tesla would be able to flip a switch and make all its vehicles self-driving – automatically increasing their value and making them infinitely more competitive than other vehicles.

How did Musk neglect Tesla’s automotive business?

The clearest example is the fact that Tesla launched a single new vehicle in the last 5 years: the Cybertruck, which proved to be a total flop.

The Cybertruck launched in 2023 at a much higher price and significantly shorter range than what was promised when unveiled in 2019. With a reservation backlog at over 1 million units, Musk said that he could see Tesla eventually selling 500,000 units a year and Tesla planned for an initial production capacity of 250,000 units a year.

Now, a year and a half into production, Tesla is having issues selling the Cybertruck at 10% of its planned production capacity installed at Gigafactory Texas.

Musk also canceled Tesla’s plan to build a “~$25,000 electric car”, which would have greatly fueled demand and allowed Tesla to grow its delivery volumes. The CEO didn’t believe that the vehicle program would make sense if Tesla solved autonomy. He said in October 2024:

“I think having a regular $25,000 model is pointless. It would be silly. It would be completely at odds with what we believe.”

What Musk, and by extension Tesla, believes is that the automaker is on the verge of solving self-driving, but he has thought that to be the case every year for the last 6 years.

There’s no evidence that it is now on the verge of happening, or at least, not on the hardware that Tesla has delivered so far.

It’s clear that this crucial mistake about the timeline of self-driving has led Musk to make many mistakes about how to manage Tesla in the last few years.

For example, Tesla’s decision to remove turn signals and gear shift stalks from vehicles started with Model S and Model X in 2021. The CEO saw them as superfluous in a self-driving world, which he thought was imminent. Now, Model S and Model X sales have crashed.

Tesla brought the same design to the Model 3 with the refresh last year. Seeing the mistake years later, Tesla decided to keep the turn signal stalk with the Model Y refresh this year, and the stalk is rumored to make a comeback on the Model 3.

Perhaps the biggest mistake Musk has made about self-driving is promising that “all Tesla vehicles built since 2016 have the hardware capable of self-driving” to a level that would enable a robotaxi service, which in SAE self-driving terms would mean level 4-5.

Musk himself has already admitted that Tesla has been wrong about that twice: the automaker had to upgrade Tesla owners having the “2.5 Autopilot computer” to the “3.0 self-driving computer”, which Musk recently admitted will also not be able to get Tesla to self-driving capabilities.

He said that Tesla would “painfully” replace the computers in all vehicles of owners who purchased the “Full Self-Driving” (FSD) software package. However, we noted that Tesla is likely in more trouble than that since it promised that “all Tesla vehicles built since 2016 have the hardware capable of self-driving” – not just those whose owners bought the FDS package. Considering this greatly affects the resale value of those vehicles, you can make the argument that there are millions of Tesla owners out there who are owed a retrofit or compensation for Tesla’s mistake.

This is a current liability at Tesla worth billions of dollars, and there are already examples of lawsuits about this issue.

These are all management mistakes that ultimately fall on Elon Musk, Tesla’s CEO.

Then, there are plenty of mistakes that Musk has made outside of Tesla that is affecting the company. The hard turn to the right, buying Twitter, boosting misinformation and Russian propaganda on the platform, financially backing Donald Trump, joining the administration and slashing critical government program indiscriminately.

Regardless of if you agree or not with Musk’s politics, these are things that you simply shouldn’t do as the face of a major consumer product company as you will undoubtedly anger a large part of your consumer base.

That’s exactly what’s happening.

There are now weekly demonstrations at Tesla stores around the world, and sales are crashing in many markets, especially in those where Musk got politically involved, like Germany, where Tesla sales are down 70% so far this year.

Musk is virtually erasing two decades of hard work to build Tesla’s brand into the world’s leading when it comes to electrification and renewable energy.

Now, for a large part of the population, Tesla is just seen as the piggybank of an out-of-touch oligarch.

Tesla is not dead yet, but if Musk continues to be the face of the company, it looks like it’s certainly going in that direction as this brand issue and declining demand is not going away.

Some of his fans cling to the idea that the automaker is about to solve self-driving, but this belief is largely based on Musk’s claims, which have been consistently wrong.

Now, it’s not to say that Tesla hasn’t made great progress on that front, but if we are to listen to the company’s own goal to be safer than humans, it means achieving “miles between critical disengagement” equivalent to human miles between collisions, which is 700,000 miles, according to NHTSA.

The latest available crowdsource data, a dataset that Musk has positively referred to twice lately, shows that Tesla is currently at about 500 miles between critical disengagement.

Electrek’s Take

While Tesla might not die under Musk, I sincerely think that, at best, it will be a fraction of what it was at its peak, which means no bigger than it is now or in 2023.

Musk’s brand is toxic and doesn’t look to be improving significantly now that he has attached himself to identity politics, culture wars, and Trump.

Looking at Tesla fans and shareholders who still support him, their main hope appears to be self-driving and robots. On the self-driving front, I think it’s delusional to believe that Tesla will solve self-driving on its current hardware.

I think it has made some great progress, which may result in Tesla achieving valuable levels of self-driving on next-generation hardware in the next few years. However, others are on the same path, and you have to balance Tesla’s effort against the giant liability it created for itself by promising it on millions of other vehicles.

As for the robots, I’m actually somewhat bullish on humanoid robots, and I do believe that Tesla has some competitive advantage on that front. However, it’s foolish to think they will simply leapfrog the competition, which is significant in the sector.

Tesla’s core business remains selling cars and batteries. There’s no doubt that the business of selling cars is not going well for Tesla right now, and under Musk, there’s no clear path to improvement. The energy business is booming, but margins are falling, and competition is increasing—especially from companies like CATL and BYD, which supply the cells that Tesla uses for its stationary batteries.

On the car side, Tesla is indeed planning to launch cheaper cars this year, but that plan was a pivot after Musk canceled the “$25,000 Tesla.” These new vehicles are expected to be built on the same platform as Model 3 and Model Y, so they will be closer to these models and cannibalize them.

I’d be surprised if they are enough to avoid Telsa from having its annual deliveries decline again this year.

I have been saying this for a while, but it’s time for Elon to go.